The imposition of Cess of Rs.100 per MMBTU on the industries (including Captive Power) in the Finance Bill 2012, as per the amendment of Act XXI of 2011 in the Gas Infrastructure Development Cess Act 2011 for the second schedule is indeed a hard hitting step by the Government, rendering the Textile Industries cost of doing business even higher, belying claims that there would be incentive for the Textile Industry in this Budget and appears to be one more nail in its coffin, were the feelings of Chairmen of all the Value Added Textile Associations, here on Wednesday at a press conference.
Rana Muhammad Mushtaq Khan, Chairman, Value Added Textile Forum & Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association stated that the utilities are never a tool for revenue generation. Utilities are essential commodities and lifeline for citizens in general and industry in particular. Value Added Textile Exports of Pakistan have gone down by 9.8% whereas exports of our competitors India have gone up by 23.87%, Bangladesh by 7.86%, China by 2.05%.
The growth in our exports has declined considerably in comparison to our neighboring competing countries – Bangladesh, India and China. Given below is a comparison of the same:
From this it is crystal clear that any increase in cost of manufacturing would further lead to decline in the exports of Pakistan which would result in decline in foreign exchange earnings; more unemployment; worsening law and order situation and chaos.
M. Jawed Bilwani, Chairman, Pakistan Apparel Forum said that the Textile Industry, more especially the Value Added Textile Industries are striving to earn sorely needed foreign exchange at such crucial times faced by the Government and as such the Government should make sure that adequate gas at competitive price is made available to the Value Added Textile Industry instead of such frequent increase in Gas prices. If the increased cost is added to the cost of manufacturing, ultimately cost of garment increases because the Gas tariff in Pakistan is 183% higher than Bangladesh and now after imposition of Cess of Rs.100 per MMBTU it will become 216% higher than Bangladesh and consequently the end result would be that Bangladesh will be quite competitive and we will be out of competition in the world market. Bangladesh would greatly benefit with increase in their exports to such an extent that would be disastrous for Pakistan.
